Focusing on the Bank of England resolution, Powell stated "high inflation" to limit gold price increases, Trump may have approved attack plan against Iran

Basic news

On Thursday (June 19, Beijing time), spot gold trading was around $3,372.90/ounce, gold prices fell on Wednesday, the Federal Reserve kept interest rates unchanged and suggested that the pace of interest rate cuts will slow down in the future. Chairman Powell said that the Fed expects "quite high inflation" in the next few months, and U.S. crude oil trading was around $73.42/barrel, investors weighed the possibility of Iran-Israeli conflict and the possibility of direct involvement in causing supply disruptions.

Holiday reminder

Key points to focus on: Bank of England interest rate resolution, Swiss National Bank interest rate resolution, and Australian unemployment rate.

Stock and P.P. 500 closed almost flat on Wednesday, giving up earlier gains after Fed Chairman Powell said eouu.cnmodity price inflation is expected to rise in the summer as U.S. President Trump's tariff impact penetrates consumers.

The Federal Reserve kept interest rates unchanged as expected. In the statement, policymakers maintained expectations of two rate cuts this year, but more and more people are not expected to cut rates. In addition, they have slowed down slightly, cutting interest rates by 25 basis points in 2026 and 2027.

The stock market rose moderately before Powell's speech. U.S. Treasury yields also shrank most of the earlier declines as he spoke.

SpartanCapita"He made it clear that he would not change monetary policy until they determine the impact of tariffs on inflation," he said. "So yields will rise, and the impact of tariffs will take time to show." Investors are also paying close attention to the development of the situation in the Middle East. Some fear that the United States may be more directly involved in the air war between Israel and Iran.

Iranian Supreme Leader Khamenei rejected Trump's request for unconditional surrender. Trump said his patience was exhausted, but he did not indicate what steps would be taken next.

The energy sector led the decline in the S&P 500 index sectors, with the largest increase in information technology. The Dow Jones Industrial Average was 0.10% to 42,171.66 points; the S&P 500 fell 0.03% to 5,980.87 points; and the Nasdaq rose 0.13% to 19,546.27 points.

The number of first-time unemployment benefits released earlier that day showed that the number of new Americans applying for unemployment benefits fell last week, but remained at the level of further loss of momentum in the labor market in June. Gold prices fell on Wednesday after the Fed kept interest rates unchanged and suggested a slowdown in the future, and Chairman Powell said the Fed expects “quite high inflation” in the eouu.cning months.

Spot gold fell 0.4% to $3374.75 per ounce. The settlement price of US gold futures rose 0.03% to $3,408.1.

Spot gold rose briefly during the session. Previously, the Federal Reserve maintained the target range of the indicator interest rate unchanged at the current 4.25%-4.50%, and said it would cut interest rates by 50 basis points for the rest of this year.

However, independent metals trader TaiWong said, "Powell repeatedly reiterated that the Fed is currently in a good position to stay on the wait-and-see state given the low and stable unemployment rate, which weakened initial optimism. He hinted that interest rate cuts may be possible at the September meeting, but this is not enough for asset and gold markets, as they had originally hoped that the Fed would take a more dovish tendency. Gold needs to return to $3,400 for the longs to dominate."

While policymakers still expect a 50 basis point cut this year, they believe that the pace of interest rate cuts will slow slightly in the future, with 25 basis points expected in 2026 and 2027 respectively. Powell also said the forecast could be adjusted based on upcoming data, especially inflation data.

At the same time, Trump said on Wednesday that he may meet with Iran to discuss the Iraq-Israel conflict. Geopolitical tensions and low interest rates have boosted the attractiveness of gold.

Spot silver fell 1.5% to $36.70 per ounce, while platinum rose 4.3% to $1,319.03 per ounce, up 5% during the session, reaching its highest level since February 2021. Palladium fell 0.5% to $1046.75 per ounce.

Goldman Sachs said in a report that the recent rises in platinum and silver are mainly speculative and lack fundamental support.

Oil market

Oil prices closed higher in a volatile period on Wednesday as investors weighed the possibility of a direct involvement in the U.S. causing supply disruptions.

Brent crude oil futures closed up 25 cents to $76.70 a barrel. U.S. crude oil rose 30 cents to $75.14. Earlier this trading day, crude oil prices fell about 2%. On Tuesday, prices jumped more than 4%. Iran’s supreme leader Khamenei rejected U.S. President Donald Trump’s request for unconditional surrender, saying his patience has been exhausted but has not indicated what measures will be taken next.

Trump said outside the White House that he refused to say whether he had made any decisions about joining Israel in bombing against his old rival Iran, "I might do that. I probably won't do that. I mean, no one knows what I would do."

Trump said Iranian officials had contacted on the negotiations, including possible meetings at the White House, but "it's too late to talk." "The crude oil market is still on the wait-and-see state, and the Israeli conflict with Iran will still bring a series of question marks that may cause Brent crude oil to soar to a high of $83 per barrel and may also prompt crude oil prices to fall back to the region around $68," said analysts at energy consulting firm Ritterbuschand Associates in a report. "Iran is the third largest producer of OPEC, mining about 3.3 million barrels of crude oil a day.

The Fed kept interest rates stable on Wednesday, with policymakers saying borrowing costs still likely to fall this year, but slowing down the overall expectation of future rate cuts as the Trump administration’s tariff plan is expected to lead to higher inflation.

The U.S. Energy Information Administration said on Wednesday that crude oil inventories fell by 11.5 million barrels to 420.9 million barrels last week. Analysts had expected a 1.8 million barrel reduction.

Foreign Market

The dollar rose against most major currencies on Wednesday after the Fed kept interest rates unchanged, but remained weaker against the yen as economic uncertainty and tariff issues continue to cast a shadow on the dollar outlook. Policymakers still predict a 50 basis point cut this year, but slowed down the pace of future rate cuts, fearing President Trump's tariffs would stimulate inflation.

Juan Perez, head of trading at Monex, USA, said, "The speculation in the market is still pending. The second quarter data will be key and it will make us truly realize that we are facing actual recession pressures that will force the Fed to reconsider its policies, and the signals they receive are mixed, so the signals they send are also mixed."

The Fed's decision is a thing of the past, and the market is still focusing on the battle between Israel and Iran, which stimulated investors to seize the safe haven.

Israel has bombed its old enemy Iran in the past six days to stop its nuclear activities and claims the Islamic Republic needs to change its government.

The U.S. military is also strengthening its presence in the region, which has sparked speculation about U.S. intervention, with investors worried that U.S. intervention will expand conflict in this region with important energy resources, supply chains and infrastructure.

Iranian Supreme Leader Khamenei rejected Trump's request for unconditional surrender on Wednesday, and the U.S. president said his patience was exhausted but did not reveal clues to his next move. The dollar has become a safe haven again, with exchange rates up about 1% against the yen and Swiss francs since last Thursday.

The dollar's exchange rate against a basket of six other major currencies is still down about 8% this year, as confidence in the U.S. economy and the reliability of the Trump administration as a trade and diplomatic partner are weakened. The U.S. market was closed on Thursday due to federal holidays.

The US dollar narrowed its decline against the Japanese yen, down 0.06% at 145.18 in the late trading; the US dollar rose 0.36% to 0.8190 francs.

Earlier in the day, the dollar remained in a weaker range after data showed that the number of new Americans applying for unemployment benefits fell but remained high.

At the same time, the Swedish central bank cut interest rates as scheduled, causing the Swedish krona to fall against the euro, with the euro rising 1% to 11.0770 kroner.

On Thursday, the Swiss National Bank, the Bank of England and the Norwegian Bank will announce their respective interest rate decisions.

The pound fell 0.12% to $1.3411 after it was boosted by data ahead of the Bank of England's resolution. The Office of National Statistics announced on Wednesday that the annual growth rate of consumer prices in May was 3.4%, in line with the forecast.

International News

The US government resumes application of foreign student visas

On June 18, local time, the Trump administration of the US resumed application of foreign student visas, but required access to the social media accounts of visa applicants.

Trump: The United States does not seek a ceasefire but requires that "Iran has no nuclear weapons"

On June 18, local time, US President Trump stated on the current conflict between Iran and Israel that the United States is not seeking a ceasefire, but what the United States is seeking is "complete victory", that is, "Iran has no nuclear weapons." In addition, Trump also said that "there is still a possibility of reaching an agreement." Earlier that day, Trump had made a series of remarks on the Iran issue. Trump said he has not yet decided whether to take military action against Iran. He also said that Iran wants to negotiate and has expressed his willingness to eouu.cne to the White House.

Powell: Monetary policy still needs to "moderately limit" the economy

Feder Chairman Powell said at a press conference that given the current inflation situation, monetary policy still needs to impose some restrictions on the economy. The current interest rate level is not very high. The current policy can be said to be moderate or moderately tightened.Now it may be more inclined to be "moderately restrictive". He added: "If you look at the current economic performance, you will find that its performance is not like experiencing a 'very tight monetary policy'."

Federal Medal: The Fed opens its doors to cut interest rates in the second half of the year, and officials are clearly divided.

"Federal Medal" Nick Timiraos issued a statement saying that the Fed maintained interest rates unchanged this time, leaving a possibility for interest rate cuts in the second half of this year. To resume interest rate cuts that began last year, Fed officials may need to see a weaker labor market or there is stronger evidence that the price increase caused by tariffs will be relatively modest. The published forecast shows officials are open to whether evidence will be available by the fall. The new interest rate forecast highlights the differences among 19 officials. Ten of them are expected to cut interest rates at least twice this year, which is smaller than in March, and two are expected to cut interest rates once. Meanwhile, seven figures believe there will be no change this year, up from four in March.

Ukraine is preparing to launch lithium mine development tender. The first project of the Ukrainian mineral agreement is about to be implemented.

On June 18, local time, Yermak, director of the Ukrainian Presidential Office, announced on his official social platform that Ukraine is preparing for the public bidding for the development of the Dobra lithium mine in Kirovogla Prefecture, and the project may become the first key project to cooperate with the United States. Yermak said that the results of the previous talks between Ukraine and the United States in Washington are being transformed into concrete actions, and the cooperation process is being carried out smoothly. Yermak also revealed that during the G7 Leaders' Summit held in Canada, he met with Ukrainian Treasury Secretary Besent with Ukrainian First Deputy Prime Minister and Minister of Economy, and held in-depth consultations on the details of cooperation, and Ukrainian and the United States will continue to promote related work. On May 12 local time, the Ukrainian President's website released a message saying that President Zelensky signed a law on approving the "Agreement for the Establishment of the US-Ukrainian Reconstruction Investment Fund."

Iranian officials: The direct involvement of the United States means Hezbollah will take action

According to Al Jazeera, senior Iranian officials said that if the United States intervenes in the confrontation, Iran will have the option to attack maritime targets and enemy positions. The direct involvement of the United States means Hezbollah will take action. Any direct U.S. intervention in the frontline will pose an unprecedented threat to enemy ships.

Spoken that the Fed's interest rate cut is too late Trump criticized the Fed's chairman again

On June 18 local time, before the Fed was about to announce the interest rate resolution, US President Trump once again criticized the Fed's Chairman Powell, saying that he was "stupid" and "politicized" and that the interest rate cut was "too late". On the same day, Trump said at the White House that he repeatedly urged Powell to take action. Trump also said, "Maybe I should go to the Fed myself" and thought he "can do better than these people." Powell was nominated as chairman of the Federal Reserve during Trump's first presidency. He officially took office in February 2018 and was re-elected during former President Biden's administration in May 2022, with a term of office until 2026May 2019. According to relevant laws, the US president nominates the candidate for Federal Reserve Chairmanship, it must be approved by the Senate. Trump has criticized Powell many times this year and threatened to remove him from his position as Fed chairman. Powell said Trump, as president, has no legal authority to remove him from office and will work until the end of his term.

People familiar with the matter revealed that Trump has approved the attack plan against Iran but has not issued a final order

Three people familiar with the matter said that U.S. President Trump had told his senior aides on the evening of June 17 that he had approved the attack plan against Iran but would not issue a final order to see whether Iran would give up its nuclear plan. According to people familiar with the matter, Trump hopes to force Iran to meet its demands through threats. People familiar with the matter also revealed that the Fordo nuclear facility, which Iran has heavily defended, may become a target of the United States - a nuclear facility hidden deep inside the mountain, and military experts generally believe that only the most powerful giant ground-boring bomb can destroy it.

Domestic News

China reduced its holdings of U.S. bonds in April, Britain and Japan increased its holdings

Data from the U.S. Treasury Department showed that China held US Treasury bonds in April were US$757 billion, a decrease from US$765 billion in March; UK holdings were US$808 billion, an increase from US$779 billion in March; Japan held US$1.135 trillion, and US$1.131 trillion in March.

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